Stock futures nudged higher by possible ECB deal

Stock futures in the US edged higher Tuesday morning on hopes that the European Central Bank will work out a deal to help Spain and Italy borrow at cheaper rates. Stock futures on the Dow rose 0.2 percent to 13,255.

A general view of a structure of the Euro currency sign is seen in front of the European Central Bank (ECB) headquarters in Frankfurt earlier this month. Stock futures rose Tuesday morning as the ECB worked towards a deal to help out Italy and Spain.

Hopes that the European Central Bank will reach a deal to help Spain and Italy borrow at cheaper rates nudged stock futures and financial markets higher on Tuesday.

Investors are increasingly convinced that the ECB will buy some eurozone countries' government bonds to help reduce their borrowing costs. The German central bank, a key member of the ECB, is alone in opposing such a move and some traders are betting that a compromise will be reached.

Spain and Italy's borrowing rates have in fact been dropping over the past few weeks on expectations for such an ECB plan. On Tuesday, Spain was able to raise €4.4 billion ($5.4 billion) in short-term debt at sharply lower interest rates than at the last such auction.

Economists say the German central bank is unlikely to on its own to block the ECB from going ahead with some form of rescue plan — even German Chancellor Angela Merkel has sounded open to the ECB's ideas.

"While the ball might well be in the court of the German hard-liners, it is very difficult to see what shot they can take from here," said Simon Derrick, analyst at Bank of New York Mellon.

According to preliminary sketches of the ECB's bond-buying plan, Spain would first have to formally ask for financial aid from Europe's bailout funds. Madrid would have to accept some conditions, such as economic policies and debt reduction targets, in exchange for the aid. The country has said it would consider such a move if the conditions are reasonable.